Foreclosures dropping, but statewide rate remains high

Published: Thursday, December 12, 2013 at 1:00 a.m.

Last Modified: Wednesday, December 11, 2013 at 7:33 p.m.

New foreclosures are waning throughout Southwest Florida, as more homeowners find economic stability and lenders cut loan modifications for those still behind.

But Sarasota and Manatee counties continue to rank among the nation's worst areas for foreclosure rates, with one in every 432 local homes now in some stage of default — nearly triple the U.S. average, new figures show.

The foreclosure data adds another layer of uncertainty to what has already become a foggy home sales market. Industry analysts are struggling to determine when banks will begin moving their foreclosures and ascertain how the properties could affect home values.

At the same time, experts continue to question whether a so-called “shadow inventory” of looming defaults will affect the region's market. Most experts believe foreclosures will remain a problem locally for at least another three or four years.

“The total number of foreclosures in the court system has radically decreased, and we have seen a lot more properties go through the cycle,” said Jack McCabe, a Florida real estate consultant. “But Florida has been at the top of the nation for foreclosures all year — that should be eye-opening.

“We still have a large problem to deal with.”

There were 1,187 homes between Sarasota, Manatee and Charlotte in some stage of foreclosure in November. That was up 27 percent from October, but the totals remain 30 lower than they were at this time last year, says industry researcher RealtyTrac Inc.

Home defaults have now seesawed from month to month for most of the year. But the totals have generally remained well below those of 2012, when lenders released a wave of pent-up cases that had been waiting until the conclusion of the national mortgage settlement.

Across Florida, foreclosures cases are moving through the courts at a faster pace this year, the result of a new state law aimed at expediting the process. The bulk of Southwest Florida's foreclosures in November were properties that had been scheduled for a future foreclosure auction. That suggests some new distressed listings may enter the market in early 2014, providing the region's tight housing supply with a little relief.

Lis pendens, or early-stage foreclosure filings, fell by 59 percent over the year in the region's three counties. Bank-owned listings already on the market, meanwhile, fell 21 percent from November 2012, says RealtyTrac data.

The slowdown in foreclosure activity should help regional home prices that have appreciated by double digits this year. The trend also bodes well for new-home builders, who are ramping up again after a downturn in which they couldn't compete with depressed foreclosure prices.

Industry observers attribute the recent slide in home defaults to rising property values, which have left fewer area homeowners underwater on mortgages. Improvements in the job market also have helped.

But research continues to suggest a dangerous number of area borrowers remain behind on their payments — threatening housing's overall recovery. Some also fear the investors that have snapped foreclosures throughout Southwest Florida this year could default on another wave of mortgages if the economy suffers a setback, said Scott Petersen, a Sarasota real estate attorney.

“You can really see the dramatically drop in volume in the courts right now,” Petersen said. “But there's still a good number of older cases sitting around that the courts are trying to work though. It's such a massive issue for the banks, I still don't think they have a handle on it.”

Throughout Florida, foreclosures dropped 15 percent from October and slipped 23 percent from a year ago — the fourth consecutive month with an annual decline. But the Sunshine State continued to lead the nation with the worst foreclosure rate in November, according to RealtyTrac.

Eight of the top 10 highest foreclosure rates, among metropolitan statistical areas with populations of 200,000 or more, were in Florida. Jacksonville posted the nation's highest metro foreclosure rate, with one in every 288 homes now in default — more than four times the national average.

Other Florida metros with foreclosure rates among the nation's 10 highest in November included Miami, at No. 2; Port St. Lucie at No. 3; Melbourne-Titusville at No. 4; Orlando at No. 6; Tampa at No. 8; Sarasota-Bradenton at No. 9; and Ocala at No. 10.

All eight of those Florida markets, however — including Sarasota and Manatee — posted annual declines in foreclosure activity.

Across the country, 113,454 properties were in foreclosure last month, down 15 percent from October and 37 percent from a year ago.

The drop last month was the largest month-over-month decrease since November 2010, when foreclosures plummeted 21 percent following the revelation of a “robo-signing” scandal.

Area real estate investors say the slowdown has been noticeable, with court auctions much quieter these days. Many now question if the shadow inventory of foreclosures was overblown — or, if those homes do exist, when they will be released by banks.

“It's almost stagnant,” said Shannon Moore, broker and owner of Green Lion Realty, which works with investors in North Port and Port Charlotte.

“There's not a lot of action, and the foreclosures we do see seem to be very expensive. If the banks have these houses, they need to let them go because people are turning to builders instead.”

<p>New foreclosures are waning throughout Southwest Florida, as more homeowners find economic stability and lenders cut loan modifications for those still behind. </p><p>But Sarasota and Manatee counties continue to rank among the nation's worst areas for foreclosure rates, with one in every 432 local homes now in some stage of default — nearly triple the U.S. average, new figures show.</p><p>The foreclosure data adds another layer of uncertainty to what has already become a foggy home sales market. Industry analysts are struggling to determine when banks will begin moving their foreclosures and ascertain how the properties could affect home values.</p><p>At the same time, experts continue to question whether a so-called “shadow inventory” of looming defaults will affect the region's market. Most experts believe foreclosures will remain a problem locally for at least another three or four years.</p><p>“The total number of foreclosures in the court system has radically decreased, and we have seen a lot more properties go through the cycle,” said Jack McCabe, a Florida real estate consultant. “But Florida has been at the top of the nation for foreclosures all year — that should be eye-opening.</p><p>“We still have a large problem to deal with.” </p><p>There were 1,187 homes between Sarasota, Manatee and Charlotte in some stage of foreclosure in November. That was up 27 percent from October, but the totals remain 30 lower than they were at this time last year, says industry researcher RealtyTrac Inc.</p><p>Home defaults have now seesawed from month to month for most of the year. But the totals have generally remained well below those of 2012, when lenders released a wave of pent-up cases that had been waiting until the conclusion of the national mortgage settlement. </p><p>Across Florida, foreclosures cases are moving through the courts at a faster pace this year, the result of a new state law aimed at expediting the process. The bulk of Southwest Florida's foreclosures in November were properties that had been scheduled for a future foreclosure auction. That suggests some new distressed listings may enter the market in early 2014, providing the region's tight housing supply with a little relief.</p><p>Lis pendens, or early-stage foreclosure filings, fell by 59 percent over the year in the region's three counties. Bank-owned listings already on the market, meanwhile, fell 21 percent from November 2012, says RealtyTrac data.</p><p>The slowdown in foreclosure activity should help regional home prices that have appreciated by double digits this year. The trend also bodes well for new-home builders, who are ramping up again after a downturn in which they couldn't compete with depressed foreclosure prices.</p><p>Industry observers attribute the recent slide in home defaults to rising property values, which have left fewer area homeowners underwater on mortgages. Improvements in the job market also have helped.</p><p>But research continues to suggest a dangerous number of area borrowers remain behind on their payments — threatening housing's overall recovery. Some also fear the investors that have snapped foreclosures throughout Southwest Florida this year could default on another wave of mortgages if the economy suffers a setback, said Scott Petersen, a Sarasota real estate attorney.</p><p>“You can really see the dramatically drop in volume in the courts right now,” Petersen said. “But there's still a good number of older cases sitting around that the courts are trying to work though. It's such a massive issue for the banks, I still don't think they have a handle on it.”</p><p>Throughout Florida, foreclosures dropped 15 percent from October and slipped 23 percent from a year ago — the fourth consecutive month with an annual decline. But the Sunshine State continued to lead the nation with the worst foreclosure rate in November, according to RealtyTrac. </p><p>Eight of the top 10 highest foreclosure rates, among metropolitan statistical areas with populations of 200,000 or more, were in Florida. Jacksonville posted the nation's highest metro foreclosure rate, with one in every 288 homes now in default — more than four times the national average.</p><p>Other Florida metros with foreclosure rates among the nation's 10 highest in November included Miami, at No. 2; Port St. Lucie at No. 3; Melbourne-Titusville at No. 4; Orlando at No. 6; Tampa at No. 8; Sarasota-Bradenton at No. 9; and Ocala at No. 10.</p><p>All eight of those Florida markets, however — including Sarasota and Manatee — posted annual declines in foreclosure activity.</p><p>Across the country, 113,454 properties were in foreclosure last month, down 15 percent from October and 37 percent from a year ago.</p><p>The drop last month was the largest month-over-month decrease since November 2010, when foreclosures plummeted 21 percent following the revelation of a “robo-signing” scandal.</p><p>Area real estate investors say the slowdown has been noticeable, with court auctions much quieter these days. Many now question if the shadow inventory of foreclosures was overblown — or, if those homes do exist, when they will be released by banks.</p><p>“It's almost stagnant,” said Shannon Moore, broker and owner of Green Lion Realty, which works with investors in North Port and Port Charlotte. </p><p>“There's not a lot of action, and the foreclosures we do see seem to be very expensive. If the banks have these houses, they need to let them go because people are turning to builders instead.”</p>